Maintain vat accounting standards for easy access to vat records

In case you have shifted over to vat or value added tax system then you need to maintain vat accounting standards for quick access to VAT records. Although most eu countries like the UK do not have rigid or set standards to keep vat records, you still must make sure that all relevant vat figures are easily accessible in case the hmrc vat department asks for them or pays you a visit.

In the last decade, a lot more countries including those within the EU have shifted their tax system on goods and services to vat. This method taxes services and goods every time there is a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the UK then you certainly might have turned into a vat registered trader once your taxable sales would have hit the vat threshold limit of ?70,000 in the previous 12 months.

Once you become part in the cycle of vat tax chain then you will need to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You will be issued a distinctive vat number which will have to be mentioned in each vat invoice that you will be needed to generate with each sale. You will also have to display vat rates of every product or service sold to the clients. Whenever you purchase goods or services from vat registered traders then you will also have to check if their invoices too follow the same format as specified by hmrc vat.

Furthermore, the hmrc will even specify the regularity of filing vat returns to ensure that all vat that’s been collected by you, on your sales can be paid to your government. Your vat returns will have to give a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go into for any vat reclaim or vat refund then there are separate vat forms that need to be filled up and delivered with documentary proof. The hmrc offers several vat online services including online filing of vat returns and this should enable you to speedily complete all vat formalities consistently.

In the UK, you’ll need to maintain up-to-date vat accounting records such as banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts highly relevant to your enterprise. If you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you will also have to clearly specify the classification of those services or goods in your records. There are various accounting schemes in vat like annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will need specific techniques to maintain your required records.

As soon as you are a vat registered trader in the UK then you’ll have to follow vat regulations which have been specified by the hmrc vat department. These techniques are not really hard and by maintaining proper vat accounting standards, it will become very easy for you and the hmrc to have access to your vat records.